“Americans’ Financial Capability” by Professor Annamaria Lusardi is a new working paper published by the National Bureau of Economic Research. Professor Lusardi’s paper reports the results of a survey of nearly 1,500 Americans regarding their financial status and investment knowledge. As reported by Mary Pilon in an article from The Wall Street Journal, Most Americans Haven’t Planned for Retirement and Other Areas of Concern, there are many areas of concern.
Among other questions, the survey asked whether people have tried to estimate how much to save for retirement. Only 42% of all respondents had tried to calculate how much they would need in retirement. The results were not much better for those closer to retirement. Among respondents who were 45 to 59 years old, only 49% had tried to estimate how much they needed to save for retirement.
Planning for retirement is a crucial step towards successfully saving for retirement. Whether you estimate it on your own, use a free web-based tool, or consult with a reputable financial advisor, take the time to plan for retirement. It is well worth the effort.